Economic Analysis for Business Decisions

                                                                                                   Syllabus

                                                           103 – ECONOMIC ANALYSIS FOR BUSINESS DECISIONS

   Unit 1

Managerial Economics: Concept of Economy, Economics, Microeconomics, Macroeconomics. Nature and Scope of Managerial  Economics, Managerial Economics and decision-making. Concept of Firm, Market, Objectives of Firm: Profit Maximization Model, Economist Theory of the Firm, Cyert and March’s Behavior Theory, Marris’ Growth Maximisation Model, Baumol’s Static and Dynamic Models, Williamson’s Managerial Discretionary Theory.                                                                                                                                                                    (6+1)

Unit 2

Utility & Demand Analysis: Utility – Meaning, Utility analysis, Measurement of utility, Law of diminishing marginal utility, Indifference curve, Consumer’s equilibrium - Budget line and Consumer surplus. Demand - Concept of Demand, Types of Demand, Determinants of Demand, Law of Demand, Elasticity of Demand, Exceptions to Law of Demand. Uses of the concept of elasticity. Forecasting: Introduction, Meaning and Forecasting, Level of Demand Forecasting, Criteria for Good Demand Forecasting, Methods of Demand Forecasting, Survey Methods, Statistical Methods, Qualitative Methods, Demand Forecasting for a New Products. (Demand Forecasting methods – Conceptual treatment only numericals not expected)                                                                                              (8+1)

Unit3

Supply & Market Equilibrium: Introduction, Meaning of Supply and Law of Supply, Exceptions to the Law of Supply, Changes or Shifts in Supply. Elasticity of supply, Factors Determining Elasticity of Supply, Practical Importance, Market Equilibrium and Changes in Market Equilibrium. Production Analysis: Introduction, Meaning of Production and Production Function, Cost of Production. Cost Analysis: Private costs and Social Costs, Accounting Costs and Economic costs, Short run and Long Run costs, Economies of scale, Cost-Output Relationship - Cost Function, Cost-Output Relationships in the Short Run, and Cost-Output Relationships in the Long Run.   (8+1)

Unit 4

Revenue Analysis and Pricing Policies: Introduction, Revenue: Meaning and Types, Relationship between Revenues and Price Elasticity of Demand, Pricing Policies, Objectives of Pricing Policies, Cost plus pricing. Marginal cost pricing. Cyclical pricing. Penetration Pricing. Price Leadership, Price Skimming. Transfer pricing. Price Determination under Perfect Competition- Introduction, Market and Market Structure, Perfect Competition, Price-Output Determination under Perfect Competition, Short-run Industry Equilibrium under Perfect Competition, Short-run Firm Equilibrium under Perfect Competition, Long-run Industry Equilibrium under Perfect Competition, Long-run Firm Equilibrium under Perfect Competition. Pricing Under Imperfect Competition- Introduction, Monopoly, Price Discrimination under Monopoly, Bilateral Monopoly, Monopolistic Competition, Oligopoly, Collusive Oligopoly and Price Leadership, Pricing Power, Duopoly, Industry Analysis. Profit Policy: Break Even analysis. Profit Forecasting. Need for Government Intervention in Markets. Price Controls. Support Price. Preventions and Control of Monopolies. System of Dual Price.                                                                                                                                         (11+1)

Unit 5

Consumption Function and Investment Function: Introduction, Consumption Function, Investment Function, Marginal efficiency of capital and business expectations, Multiplier, Accelerator. Business Cycle: Introduction, Meaning and Features, Theories of Business Cycles, Measures to Control Business Cycles, Business Cycles and Business